Italy Employment Contracts

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Italian Contracts

If a foreign company is looking to hire resident employees as part of their expansion into Italy, they must comply with the recruitment regulations concerning tax, social security contributions, employment law, as well as collaborate with or adhere to any collective bargaining, trade unions, or work council agreements.

National employment legislation, collective agreements, and works council agreements are the main sources of employment law in Italy, which govern employment conditions, benefits, and health and safety regulations. The conditions performed vary according to the industry and sector.

It is important for the employer to know the existing labor laws and employee entitlements, as well as collaborate with the appropriate local employment organizations.

In Italy, an employment contract is not required by law to be concluded in writing. Oral contracts are also practiced. However, for a contract to be valid, certain clauses must be in writing, and they must be presented to the employee within 30 days of starting employment. This document must include:

  • Name and address of the employer and the employee
  • The place of work
  • The commencement date of employment
  • Anticipated duration of employment, specifying whether it is indefinite or fixed term
  • The probationary period
  • The job title or category
  • The employee’s salary
  • The duration of annual leave
  • The working hours
  • The length of the notice period (in case of termination)
  • A reference to any collective bargaining agreements, works or services agreements that are applicable to the employment relationship (if there are any)

There are a few types of contracts that can be applied in Italy:

  1. Indefinite employment contract – the standard type of employment contract in Italy, and as a rule, employment contracts are entered into for an unlimited period. Termination of this contract requires a notice period and a set of dismissal policies.
  2. Fixed-term employment contract – This contract is set by the national collective agreements. Employment law in Italy states that the overall number of fixed-term contracts must exceed a threshold of 20% of the permanently hired workforce. This contract type is limited to a maximum of 36 months and can be extended.
  3. Part-time employment contracts – This contract type must be in writing and specify the employees’ hours of work. The pay and other entitlements of part-time workers are also to be included and are pro-rated to those applicable to full-timers. Two ancillary clauses may also be added to the contract, which can provide the employer a wider flexibility – “elastic clauses” which can permit an employer to increase working time; and “flexible clauses”, which can permit an employer to vary working hours during the day.
  4. On-call job contracts – this type of contract must be drafted in writing, and employees falling under national collective agreements are also eligible to receive an additional 20% of their wages. Employees signed under this contract must declare their availability to work over a certain period, during which they can be called in with short-term notice. In some cases, conditions may provide that the employee is bound to work if called by the employer.
  5. Apprenticeship contracts – This contract type is open-ended and applies for vocational training positions. The employer can hire apprentices within certain thresholds (depending on the number of employees hired) and ensure that the apprentices acquire professional skills and qualifications.
  6. Temporary agency contracts – this contract type can be on a fixed-term or open-ended basis and can only be agreed on with qualified employment agencies. Workers under these contracts must benefit from the same legal and economic conditions available to employees of the user’s or end client’s company. Employers cannot use this contract to replace employees on strike, laid-off or involved in collective dismissals.

Most changes to an employment contract must be made with the consent of both the employee and employer. If the employer wishes to amend the employment terms, they must discuss and agree to the changes with the employee before doing so.